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The rand headed for its biggest drop against the dollar since 2016, buffeted
by headwinds, including a downbeat assessment of the economy by Moody’s
Investors Service and a
plunge in the biggest company on the Johannesburg Stock Exchange.

The currency sank as much as 3.4% against the dollar after
Moody’s said the pace of South Africa’s fiscal consolidation will be
slower than government forecasts due to weaker-than-expected economic
growth and a rising public sector wage bill. The statement came shortly
after Reserve Bank Governor
Lesetja Kganyago said growth projections were “worrying” and hinted
policy makers aren’t about to raise rates.

A drop in commodity prices and concerns about the government’s plan
to seize land for redistribution also weighed on the rand at a time when
Turkey’s woes are damping investor demand for emerging-market assets.

Naspers [JSE:NPN], which accounts for
18% of the benchmark stock index, tumbled after Tencent Holdings, in which it owns a 31% stake, missed earnings estimates.
That raised concerns about outflows from the stock market. The benchmark
index of equities fell the most since May.

The rand was 2.88% weaker at R14.65/$ by 17:22, bringing its decline this month to 9.7%. Yields on
benchmark 2026 government bonds climbed 10 basis points to 9.04 %.

“Factors that have harmed the currency today includes news from
Turkey, which points to a deepening of the crisis there, despite the
lira’s bounce back today,” said
Andre Cilliers, a trader at TreasuryONE. On the domestic front, a
statement by the ruling African National Congress on land expropriation
“put property rights back in focus and all the uncertainty that comes
with it,” he said.

South Africa must amend its constitution to limit land ownership to
12 000 hectares per farm owner and white farmers who own more than that
should cede the rest to the state without compensation, News24 said,
citing ANC Chairperson Gwede Mantashe.